Some general observations:

1/ Sometimes council officers talk about what they’d like, which is different to what the regulations specifically require;

2/ A chat with an independent town planner about issues, and how to overcome them, is usually money well spent on deals worthy of closer due diligence;

Bye,

– Steve

Hello Aaron,

I don’t see why not, provided it is on an arm’s length basis.

For instance, Z Company P/L can rent from X Unit Trust, notwithstanding they are separate but related entities.

That said, it would be wise for you to speak to your accountant / lawyer about this to ensure the terms are appropriate.

Good luck!

– Steve

Hi,

In the circumstance you describe the benefit of the tax shield from depreciation does seem marginal, especially if the extra income could justify higher borrowings.

Not everyone has a tax-free beneficiary to distribute to, and hence the depreciation tax shield is more beneficial.

Some time ago I wrote an article on the deception of depreciation. Have a read of it here:

https://www.propertyinvesting.com/depreciation/

Bye,

– Steve

Hello George7,

You have identified an issue in your due diligence, and you are right to want to try to manage and mitigate it.

However, it appears you cannot do as the vendor will not wait.

If it were me, I would go under contract with a general 45 or 60 day due diligence clause and seek to do my own investigations. Perhaps you want to point to some other need for the clause though, perhaps to get your finance sorted? Once under contract I would approach a town planner for assistance.

Assuming you cannot cover the risk, you have to assess your risk appetite to proceed (or not) with the known risk. Does the upside outweigh the downside by enough of a margin for the risk. You also want to be paid extra for the risk.

Bye,

– Steve

Hi,

This is an interesting question and I would have thought something would be legally possible, I just don’t know how. As it is a legal matter, it is best to seek legal advice. You may also like to look into reverse mortgages (do your due diligence) as a way of unlocking equity.

I imagine there will be taxation consequences of co-owning, and stamp duty issues. Again, best to talk with a lawyer.

Bye,

– Steve

Hi Charlie,

That’s interesting as I am in the final stages of winding up my USA affairs after investing there since 2009.

The best tip I can give you is to remember that money follows management. Deals might stack up on paper, but unless you have strong, reliable and trustworthy management, you will struggle to put bucks in the bank.

The taxation consequences are complex and expensive, and insurance is getting very expensive and difficult to source in some areas (like wind in Florida).

Think about what you are hoping to achieve, and then consider whether the opportunities closer to home might be less risk and aggravation.

Bye,

Hello Charlie,

This has not been my experience, nor the experience of all other’s I know.

I will do an update on the matter via a webinar soon.

Remember that the structure only works for +ve cashflow property and you will need to use business bankers. Contact Chris Berry from http://www.PropertyInvestingFinance.com for more assistance.

Bye,

– Steve

It can be hard to get loans based on business income Charlie. Let me explain…

First of all, the business is its own entity, and if it already has debt then that will count against further borrowings. The business will likely need several years of financial statements and tax returns to support profitable operations, or else will require a director’s guarantee to support the debt. Furthermore, most borrowers will only take a portion of the net income, and possibly a conservative portion!

What happens in practice is that business profits usually flow through to the owner, who then has that profit reflected on their income tax return, and who will then use that income as evidence to support borrowing capacity – either in their own name, or as a guarantor. Again, a lender may discount this income to some (or all) extent depending on their assessment of its reliability.

Re: the specifics… get in touch with Chris Berry and ask for his assessment. He can be contacted at http://www.PropertyInvestingFinance.com

Bye,

Hello there.

What’s the address please? Let me do a little bit of searching.

Do you have any marketing from when you purchased that says the larger land size? Can you demonstrate that you relied on the real estate agent’s representations(perhaps by communication pointing to discussion about land size?)

Most advertising material does come with a disclaimer on it saying, essentially, all care and no responsibility. Indeed, checking land size ought to have been done during your due diligence. Sadly though, that’s now a bit like saying don’t eat that 10th course at the Chinese buffet.

That said, you may have something to discuss with a lawyer if you feel the agent engaged in false and misleading advertising, or if the Vendor falsified their Section 32.

Note – this is NOT legal advice as I am not a lawyer. Just thoughts on what I would do if I were in your shoes.

Bye,

– Steve

Hey Dallas,

Yes, the approach continues to work: for the right investor buying the right property.

You will need to go and get legal advice about the right trust and how to set it up. That will cost several thousand dollars.

I have a resource called ‘Buyer Beware’ that explains all the structures, but it is currently out of print and needs an update. If only I had more time…

Bye,